Investors who register can access daily blog posts, latest videos, podcasts and snapshots and stay current with industry insights. On top of that, investors get additional access to the tools, technology, resources and support they need to take their business to the next level.

Welcome to WisdomTree

Terms & Conditions

Important Notice

If you are not classified as an institutional investor, we will categorise you as a retail investor. At this time, we cannot send communications directly to retail investors. You are welcome to view the contents of this website and to register your details so we have a record for the future, however we will not send you any materials directly.

This website is maintained by WisdomTree UK Limited (registered number 07443535) with registered office at 3 Lombard Street, London EC3V 9AA, United Kingdom. WisdomTree UK Limited is authorised and regulated by the Financial Conduct Authority.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

United States Persons

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area.

Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the "Advisers Act").

Exclusion of Liability

Certain documents made available on the website may have been prepared and issued by persons other than WisdomTree UK Limited. This includes any prospectus. WisdomTree UK Limited is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, WisdomTree UK Limited shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no warranty as to the accuracy of any information or content on the website. The terms and conditions applicable to investors will be set out in the relevant prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that:

The investment performance of any security referred to on this website can be volatile and can go up or down and you can lose your entire investment.

Past performance is not an indication of future performance.

Rates of exchange may affect the value of investments.

Applications to invest in securities referred to on this website must only be made on the basis of the relevant prospectus.

Cookies

WisdomTree UK Limited may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes. These are statistical data about users' browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking 'I agree' below you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps WisdomTree UK Limited provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

Important Notice

By selecting 'Institutional investor', you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Elective Professional Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in an jurisdiction outside the European Economic Area.

This website is maintained by WisdomTree UK Limited (registered number 07443535) with registered office at 3 Lombard Street, London EC3V 9AA, United Kingdom. WisdomTree UK Limited is authorised and regulated by the Financial Conduct Authority.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

United States Persons

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area.

Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the "Advisers Act").

Exclusion of Liability

Certain documents made available on the website may have been prepared and issued by persons other than WisdomTree UK Limited. This includes any prospectus. WisdomTree UK Limited is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, WisdomTree UK Limited shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no warranty as to the accuracy of any information or content on the website. The terms and conditions applicable to investors will be set out in the relevant prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that:

The investment performance of any security referred to on this website can be volatile and can go up or down and you can lose your entire investment.

Past performance is not an indication of future performance.

Rates of exchange may affect the value of investments.

Applications to invest in securities referred to on this website must only be made on the basis of the relevant prospectus.

Cookies

WisdomTree UK Limited may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes. These are statistical data about users' browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking 'I agree' below you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps WisdomTree UK Limited provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

The oil price has recently reacted positively to two important events. Firstly, OPEC’s proposal to reduce supply, which we documented previously, has helped propel oil to above $50 per barrel. Secondly, Russia has also contributed to the potential tightening of supply with President Vladimir Putin saying at a press conference in Turkey that "Russia is ready to join the joint measures to cap production and is calling for other oil exporters to join."[1].
However, as many commentators have noted, in both cases there is a long way to go before these statements translate into any concrete action. With respect to OPEC the end of November is the key point of focus for a firm agreement. Russia’s actions on the other hand, whilst not tied to any specific timing, have the ability to significantly impact the overall supply balance.
Over the past ten years, Russia’s oil production has increased at a reasonably steady pace. It has risen from a low point of 9.65 m b/d at the end of 2006 to a recent high of 10.9 m b/d at the end of March this year. Whilst Russia is a significant producer it is just as important to consider exports as a percentage of its production. Having averaged close to 50% over the six years to the end of 2012, exports as % of production hit a low point of 38.5% in February 2014. Since that nadir it has continued to rise and as of June 2016 was back to its long term average at 49.5%.

Perhaps a more salient way to consider Russian exports is that it has added around 1.3m b/d to overall supply in the oil market. This is interesting in the context of OPEC’s recent stated desire to lower production from the recent high in September 2016 of 33.6 mb /d to between 32.5 and 33 mb /d. Overall OPEC is only targeting a reduction of a maximum of 1mb /d, somewhat less than the amount added by Russia over the past two and half years.

Clearly Russia’s ability to impact the over supply side of the market can be an important determining factor with respect to prices. If one considers Russia’s oil production relative to that of Saudi Arabia it has been on a steadily increasing upward trend. Recently it has spiked to the highest level over the past ten years, reaching over 11.1 mb /d in September. In contrast Saudi Arabia’s levels of production, whilst on the increase over the past two years, have been more volatile. This historically has been indicative of Saudi Arabia’s willingness to be the key swing producer within OPEC that can impact pricing. It also a function of the fact that Saudi Arabia represents over 31% of total OPEC output.

Whilst Russia’s impact on oil supply – and therefore the stability of the oil price – will be an important factor over the next few months, there are other factors to consider. A number of OPEC nations, over the past year have come to dominate the increased supply of oil. Iran has been able to resume production at higher levels and over the past year this has risen by close to 30% from 2.8m b/d to over 3.6m b/d. This increased output is a key component of Iran’s rehabilitation to the international oil market and reflects an easing of sanctions. To put this into perspective the current level of output by Iran is only 11% below its highest levels over the past 15 years and capacity constraints suggest that it is unlikely to reach such levels in the short term. Other substantial OPEC producers that may impact the forthcoming negotiations include Iraq, which is currently at record levels of output, up almost 7% from one year ago levels. Additionally, supply disruptions in Nigeria have constrained production by over 24% over the past year, a decrease of almost 0.5m b/d and overall Nigerian output is close to 40% below peak levels.

The volatility in the oil price, which peaked at close to 75% in February this year, has helped create trading opportunities and turnover in short and leveraged ETCs that track the oil price. In May and June of this year, on-exchange ETC turnover was close to $1.5bn even as realised oil price volatility edged significantly lower to between 30 and 40%. Recently there has been a pick-up in volatility to over 45% and turnover that has risen to over $1.1bn. Even in times of lower volatility it is apparent that investors are looking to position themselves for potential moves in the oil price.
Although the price of oil has stabilised at levels ranging from $40 to $50, the next couple of months ahead of the next formal OPEC meeting will create more opportunities for oil price volatility. Whilst OPEC has a stated intention of lowering production it is noteworthy that there are complex dynamics both within OPEC and with significant non-OPEC producers such as Russia. On balance, from a macro-economic and financial stability perspective most parties are aligned to create a more robust environment for the oil price.

For investment professionals only. This communication has been provided by WisdomTree Europe Ltd which is an appointed representative of Mirabella Advisers LLP which is authorised and regulated by the Financial Conduct Authority. Please view our full disclaimer. View our Conflicts of Interest Policy and Inventory at www.wisdomtree.eu/cofi.

This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.

FOLLOW US

This website and its content has been provided by WisdomTree UK Limited which is authorised and regulated by the Financial Conduct Authority.

The price of any Shares or the value of an investment in ETPs may go up or down and an investor may not get back the amount invested. Past performance is not a reliable indicator of future performance. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any financial instrument or product or to adopt any investment strategy.

For Professional Clients only. If you are not classified as either a Professional Client or Elective Professional Client. See client types here: Investor Types

If you are not classified under either of the other two categories, we will categorise you as a retail investor. You are welcome to view the contents of this website and to register your details so we have a record for the future, however currently we do not send materials directly to retail investors.